Speaking at the second Annual Mergers & Acquisitions Forum being held in Dubai in the United Arab Emirates, Sanjaya Sharma, chief executive of the global e-learning producer, Tata Interactive Systems (TIS), has outlined an integration solution that enables companies to maximise value from an acquired or merged business.
The prestigious forum, attended by many of the Middle East's most influential chief executive officers, managing directors, vice presidents and directors, attracts delegates from the most advanced investment companies and other key enterprises across the major industries in the Middle East.
According to Mohamed Alwi, the event's organiser: "The Forum highlights strategies for operating effectively within a restricted, regulated framework. Importantly, the Forum addresses issues relating to overcoming potential obstacles and challenges for the effective integration of businesses."
In his keynote address, Sharma revealed that, in the first six months of this year, there were more than 15,000 mergers recorded — 10 per cent more than last year — and the value of these mergers was $367.8 billion. However, he added, analysts have revealed that 60 per cent of acquisitions fail to deliver returns exceeding the cost of capital; 70 per cent of mergers fail to achieve their anticipated value, and only 17 per cent of these deals provided substantial returns to shareholders.
"The reasons for this include lack of a clear strategy; misunderstanding the nature of the assets; inability to maximise potential synergies; and mismanaging organisational and human issues," said Sharma, whose recipe for merger and acquisition success is 'integration', involving 'visualising the future enterprise' and 'preparing the workforce for the future'.
Sharma was speaking from personal experience. In January this year, TIS acquired two companies — Tertia Edusoft AG in Switzerland and Tertia Edusoft GmbH in Germany — from the Tertia Group, a leading provider of human resources management solutions in Germany.
With these acquisitions came the ability to produce enterprise-wide management simulations through Tertia's proprietary product line, TOPSIM, the leading simulation product in Germany. TOPSIM has been successfully implemented in business education and professional training for more than 20 years in German-speaking countries and is currently being used by more than 1,000 customers.
TOPSIM - a complex, decision-making multiplayer simulation that offers learners a systemic perspective of the business environment — complements TIS's proprietary model for building simulations: Simulation-based Learning Objects (SimBLs™). SimBLs™ are compact, web-enabled applications that provide an immersive and focused learning experience, related to particular concepts.
"Both of these products can be used successfully in the integration process to bring about a successful merger," said Sharma. "TOPSIM addresses the 'visualising the future enterprise' issue, while SimBLs™, along with other products like Story-based Learning Objects (StoBLs™), help to prepare the workforce for the future."